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Amidst the collapsing Indian stock market and the falling value of the rupee, there is a race among foreign investors to exit India. In this stampede, foreign portfolio investors have sold shares worth Rs 19,759 crore in a week. Foreign investors have returned after collecting this much money from the Indian stock market between January 20 and January 24.
This is revealed from NSDL data. Even in the month of January, foreign portfolio investors have already withdrawn Rs 64,156 crore. Despite this, the pace of foreign investors withdrawing money from Indian stock markets has not stopped yet.
Is this the result of Donald Trump’s return
The exodus of foreign investors from the Indian stock market by selling it is being linked to the return of Donald Trump. This has increased investor confidence in the American economy. Donald Trump’s promises to improve the lives of the average American have made America a more preferred investment destination. Due to the increase in the interest rates of US treasury bonds and the strength of the US dollar, funds have started returning to America. For this reason, it is appealing for global investors to withdraw money from emerging markets like India.
Giving a deep wound to the rupee
Due to such withdrawal of money by foreign investors, the stock market is not only falling, it is also giving a deep wound to the rupee. The rupee is continuously depreciating against the dollar. It has become like a cycle that due to selling by foreign investors, the rupee is weakening and due to the weakening of the rupee, foreign investors are withdrawing money.
Because due to weak rupee, higher valuation and slow growth is forcing foreign investors to withdraw from the Indian market. This has increased the concern for the Indian economy on a large scale. If the attitude of foreign investors remains the same due to global factors, then Indian investors will also be forced to look towards the development of American economy or other big economies for investment.
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